We all know that numbers are important to the function of the entire universe. If all the numbers in the world vanished, maybe we would become nothing. This holds true for every organization on the planet, whether governmental or private – schools, retail stores, car dealerships, even hospitals rely on numbers in order to function and define their affairs.
I would like to go out on a limb here and say that the finance department might be the most important facet of any organization or enterprise. Yet, harnessing the full potential of those numbers has always been the biggest issue.
For most enterprises, the finance department remains one of the most under-staffed segments, while being one of the most critically important. They are the ones who understand the working capital definition, comprehend how to deal with the IRS and pretty much protect you and your company from failure.
The financial department is the backbone to multiple organizational functions – none of them can operate without it. Whether subscription handling, sales, employee payroll, office management, and every other department under the sun, they all are waiting for accounting.
None of these processes can wait, either. They most often than not need immediate attention and a direct resolution. Due to the issue of understaffing, primarily because of cuts in operational expenditures, it has become vital for many organizations to shed some of their workforce. This has left some gaps that need filled. Here is why many companies are no longer fearing automation.
Manual and Paper Processes Are so Debilitating
What makes the manual paper processes enfeebling to enterprises and organizations alike is when an invoice arrives in your accounts payable department, it needs to be approved by the individual who ordered the goods and/or services before it’s actually paid for.
In order to improve efficiency and lower costs, a company would want to route the invoice in such a way that it gets approved and paid as quickly as possible, subverting the red tape and wasted time waiting. With a rapid approval process, organizations that have a good cash flow are capable of taking advantage of early payment discounts, which saves them around 2 to 3 percent.
How many times have you heard of or dealt with invoices sitting in an approver’s inbox for days or even a week, or just plain go missing, which leads to additional employee hours and delayed payment processing? This can hamper a business, not to mention give a bad impression to clients. By automating workflows such as this, these types of issues will all but vanish. Documents will move through your organization as efficiently as possible, responding automatically to any obstacles that arise.
Boring Auditing: Forget About It
Audits can be one of the most hated ordeals for any company, and especially for the accounting department. This holds more true for those still living in the 1970s and using a paper-based system.
An auditor may ask for all the invoices from a specific year, as an example, so the company gives them access to the filing room full of metal cabinets. Then the auditor would sit in some lonely room and literally wade through a sea of documents, some of which are handwritten and hard to read. This can take not days, but upwards to a week or more depending on the situation.
Then there is the issue of some of these documents being highly confidential. Accounting documents, data and financial information must be strictly controlled, and not everyone has the right to view them. This is especially true for those companies that are traded publicly. Companies that fall under the Sarbanes-Oxley Act of 2002, they need a very detailed audit trail.
Electronic audit trails make are designed with safeguards in place that protect organizations and their employees. It records who has been accessing accounting and financial records, when they accessed them, and in what capacity. This helps in determining responsibility in case there is a fraud allegation or some other legal issue.
Procurement and Purchasing Made Simple
Internal Procurement processes are very document-heavy. The paperwork involved in tracking and managing such is very extensive. Procurement includes how supplier relationships are managed and ultimately the ordering of goods and services needed to produce a product.
For a lot of companies, this can be a staggering amount of data. In a lot of cases, even if the paper trail is converted to an older digital system, files can be incompatible, formats and systems differ from one another.
The kind of data that will be managed by automation is:
- Product research documents, supplier information, forecasting sheets, and regulatory information used internally in the planning stages of building supplier relationships.
- Defect resolution workflows used to determine whether an order met the original set of requirements, defect reports, materials data, supplier quality data, inspection reports and functional testing reports.
- Manufacturing documentation, supplier data, bills of lading, freight bills, proof of delivery, invoices, correspondence that are used to track an order.
- Requests for quotation documents (RFQs), inspection sheets and approval documents, that map against the process by which suppliers are initially identified, audited, and approved.
- Manage correspondence used to place orders with suppliers, contracts, orders, estimates, and purchase orders.
Everyone needs to start somewhere. Throughout my time doing business around the world, I have seen countless businesses make the same avoidable mistakes over and over again – the most prevalent being they analyze this kind of things to death.
When are these sort of businesses going to quit simply reading these articles and start having faith that automation is the key in this digital age? Getting rid of every single piece of paper is far better for you, your customers and your bottom line. And these sort of solutions are not expensive.